Budgeting

Budgeting means you are in control of your money, however much or little you have. There are two main things which you need to do:

Keep track of all the money you have coming in (also known as your income) and everything you spend it on.

Manage your spending. Once you know how much income you have, you know how much you can spend.

The basic rule of budgeting is thatyou must not spend more than your income.

How to budget

There are different ways of keeping track of your income and expenditure, and managing your spending. You could:

use a notebook and a calculator

try one of the many budget planners available on the internet such as through the Government-backed Money Advice Service or the generally reliable Money Saving Expert (though most are not particularly designed for teenagers)

devise your own system using Excel or similar

try one of the budgeting apps designed for tablets or smartphones – some current apps are tested here

Whichever method you choose, you need to do it regularly. A good pattern is:

Every day or week

Make a note of everything that you have spent that day or week (most people significantly underestimate their regular or minor spending – coffees, magazines etc).

Every month

Make a note of your income for that month – any allowance from your parents/carers and/or earnings from part-time or holiday jobs.

Add up all your daily or weekly spending totals and compare them with your income.

Check that you’re happy with the amount you’re spending on the different categories – sometimes it comes as a surprise.

Use this month’s figures to think about next month. Work out:

what income you are likely to have

what you need to spend (birthday presents, any trips or outings etc)

what you would like to buy and how much this is likely to cost.

Adjust your spending plans to make sure you won’t spend more than your income. If you know that you’re going to have any big expenses, see if you can plan to spend less on other things.

Some people like to have different budgets for different things. For example, if you knew you normally had £50 per month, you could budget to spend £20 on clothes, £15 on going out, and £5 on make-up/toiletries. This would leave you £10 for all those other things that always seem to come up.